Remuneration and Performance Management Effectiveness - Literature review Example

RЕМUNЕRАТIОN АND РЕRFОRМАNСЕ МАNАGЕМЕNТ АSSIGNМЕNТ 1 Name: College: Course: Tutor: Date: Remuneration and performance management assignment 1 Introduction Performance management is one of the organizational practices undertaken by high performing firms. Indeed, although the effectiveness of performance management is responsible for the high performance that some successful firms experience, it continues to elude many of them, going by the high rate of ineffectiveness of their management practices. Two articles interrogate the effectiveness of various performance management practices employed in firms, albeit using different approaches. One of the articles is titled, ‘Performance management effectiveness: Lessons from world-leading firms’ and authored by Michal Birona, Elaine Farndaleb and Jaap Paauwe while the other is titled, ‘Performance management effectiveness: Practices or context?’ and authored by Victor Y. Haines III and Sylvie St-Onge respectively although both were published in The International Journal of Human Resource Management. The ensuing discussion compares and contrasts the two articles that focus on performance management effectiveness by delving into the basis of their arguments and discussing the similarities and differences in the claims made by the others, while offering evidenced-based support for and against these claims. Performance management effectiveness Both authors take time to define performance management as a collection of activities that organizations undertake to facilitate their achievement of high performance that is aligned to their strategies and objectives (Biron, Farndale & Paauwe 2011; Haines & St-Onge2012). They also allude to the extant debate emanating from the ambiguity in the effectiveness of performance management systems and practices with as many proponents of such effectiveness being matched with proponents of the ineffectiveness of the systems and practices employed by organizations. The studies reported in both articles were instigated by the lack of sufficient knowledge that is related to the effectiveness of performance management systems and practices, which could be contributing to the poor evaluation of the performance of many organizations. Similarities in authors’ claims The authors of the two articles prosecuted similar aspects of performance management, specifically its effectiveness and its influencers and employs comparable methodologies in their approach. For instance, the two articles arrived at common factors that were likely to enhance the effectiveness of performance management practices and systems. Specifically, the authors of both articles focused on the employee performance and excluded the performance of the management of the specific design of the management system itself. In addition, both authors employed similar methodologies, which in this case, were surveys undertaken through interviews to base their findings regarding the extant systems in firms from which effectiveness of performance management practices and systems were evaluated. For instance, while Biron, Farndale & Paauwe (2011) evaluated performance management systems in 16 firms, Haines and St-Onge (2012) surveyed 312 organizations. As such, both articles interrogated the best practices used in firms that influenced or facilitated the effectiveness of performance management systems therein. The participants of the surveys undertaken in both studies were drawn from practicing managers and employees drawn from existing firms, while the articles were authors a year apart, meaning that their findings could be comparable although they could not be generalized to the entire business fraternity due to the smallness of their samples. Moreover, both articles found that training of raters and communication of performance expectations were pertinent to facilitating the effectiveness of performance management practices and systems. Indeed, Walters (2016) reiterated the pertinence of training of performance appraisers and promptness of feedback as being facilitative to effective performance management. Specifically, Walters (2016) underpinned the importance of frequent appraisal as providing the necessary feedback that was required to spur performance improvement and as part of performance management. In addition, frequent appraisals accompanied by prompt feedback provided a conducive communication platform on which to explain performance expectations while providing coaching that was pertinent to attaining expected performance levels (Walters 2016). In addition, Page (2015) observed that the frequency of appraisals and feedback had increased in the school setting, in which performance management was premised on visibility characterized by unannounced class visits coupled with frequent and feedback from learners. Differences in authors’ claims However, the authors of the two articles focused on different aspects of performance management effectiveness. At the onset, while Biron, Farndale & Paauwe (2011) focused on the structural practices that facilitated the effectiveness of performance management systems. This is evidenced by the findings of Biron, Farndale and Paauwe (2011), which indicted that performance management systems were facilitated by inclusion of strategic and tactical elements, involvement of senior managers, clarity in communication of performance expectations and formal training of performance raters. The inclusion of strategic and tactical elements into performance management systems was found to be pertinent because while strategic elements ensured cohesion between the performance management system and the organizational goals, the tactical element ensured that the performance management system facilitate decision making in the organization (Biron, Farndale & Paauwe 2011). Indeed, Espejo, Portulhak and Pacheco (2017) concurred by observing that the lack of alignment between performance management, organizational strategy and the decision-making process was prevalent in a teaching hospital in Brazil, which stiffed the effectiveness of the performance management system therein. On the other hand, Haines and St-Onge (2012) focused on the contextual variables that facilitated positive outcomes of performance management systems. Likewise, the findings by these authors came up with organizational climate, organizational culture and integration of human resource management strategically as the relevant contextual variables that contributed to positive outcomes of performance management systems. As such, while both articles came up with the common practices employed in facilitating the effectiveness of performance management systems, Haines and St-Onge (2012) went on to reiterate the pertinence of the context in which the practices of performance management systems were premised to produce positive outcomes. As such, the findings by Haines and St-Onge (2012) were enriched by the identification of the synergies between practices employed in organizations and the contexts in which they were applied to obtain a comprehensive perspective on how certain organizational contexts supported performance management practices in high performing organizations. Indeed, Busi and Bititci (2006), who had indicated measurement and management of performance systems in contemporary companies needed to be contextualized on the total business and not interrogated in isolation, had pinpointed the pertinent of organizational context. Contrastingly, the findings by Biron, Farndale & Paauwe (2011) were premised on their compatibility with the signaling theory, which formed the theoretical basis of evaluating the effectiveness of the practices employed in performance management systems. As such, they observed that organizational practices employed in performance management served as signals because they influenced behavior and attitudes that contributed to the effectiveness of the performance management systems. However, Politis and Siskos (2010) had indicated that effectiveness of performance management systems needed input from stakeholders outside the organization that would help incorporate an element of self-assessment, which would augment the deficiencies of traditional inward looking performance management systems. As such, they proposed the multicriteria self-assessment for business excellence (MUSABE) methodology as the performance management methodology that would provide a global outlook of the performance of an organization. Indeed, Vasiljevic, D, Trkulja, Z, & Danilovic, M 2014 agrees by observing that the employment of trial and error as a principle of undertaking performance management hampered the effectiveness of the performance management effectiveness because of lack of formality, criteria and structure in the performance evaluation process. Conclusion The two journal articles that were interrogated focused on the effectiveness of performance management practices and systems although they differed in the elements and aspects of the systems and practices evaluated. Indeed, the authors of both articles were alive to the ambiguity that surrounded performance management systems and practices and the high rates of failure of performance management systems in organizations. In addition, both articles agreed that good practices in performance management existed and included high frequency of performance evaluation, promptness and effective communication of feedback, and presence of evaluation structures. However, an outstanding difference is that while one article provided an overview of the general influencers of effectiveness of performance management systems and practices, the other premised its evaluation of signaling theory. Indeed, the premising of evaluation on the signaling theory by proposing that all influencers of the performance management systems should be evaluated through the lens of their influence as signalers of expected performance, and the behaviors and attitudes associated with such performance provided a more comprehensive criteria of evaluating the systems and practices. References Biron, M., Farndale, E., & Paauwe, J. (2011). Performance management effectiveness: Lessons from world-leading firms. The International Journal of Human Resource Management, 22(6), 1294-1311. Busi, M. and Bititci, U.S., 2006. Collaborative performance management: present gaps and future research. International Journal of Productivity and Performance Management, 55(1), pp.7-25. Espejo, SBM, Portulhak, H, & Pacheco, V 2017, 'Performance management in university hospitals: an empirical analysis in a Brazilian institution', Tourism & Management Studies, 13, 1, pp. 52-59 Haines, V., & St-Onge, S. (2012). Performance management effectiveness: Practices or context? The International Journal of Human Resource Management, 23(6), 1158-1175. Page, D 2015, 'The visibility and invisibility of performance management in schools', British Educational Research Journal, 41, 6, pp. 1031-1049. Politis, Y, & Siskos, Y 2010, 'Self-assessment for measuring business excellence: The MUSABE method', Total Quality Management & Business Excellence, 21, 11, pp. 1063-1083 Vasiljevic, D, Trkulja, Z, & Danilovic, M 2014, 'Towards an extended set of production line performance indicators', Total Quality Management & Business Excellence, 25, 5/6, pp. 618-634 Walters, C 2016, 'What's the Secret Sauce to Effective Performance Management?', Business Journal (Central New York), 30, 14, p. 3B,  Read More